Murgitroyd Group revenue rises as it acquires Chapman IP

By Josh White

Date: Thursday 21 Feb 2019

(Sharecast News) - Murgitroyd Group announced its unaudited interim results for the six months ended 30 November on Thursday, with revenue increasing 5% to £22.67m, as well as the acquisition of Chapman IP and a number of board changes.The AIM-traded firm said its profit before income tax for the half-year rose to £1.70m from £1.67m, with basic earnings per share improving 3% to 14.2p.

It proposed an interim dividend of 7p per share, up 7.7% year-on-year from 6.5p.

Murgitroyd said it had a "strong" net cash position at period end of £2.03m, down from £2.83m at the start of the period.

Murgitroyd also confirmed it had made an earnings-enhancing acquisition of the entire issued share capital of Chapman IP - a UK attorney practice based in the south of England - for an aggregate cash consideration of around £6.6m.

On the executive front, the group confirmed its chief executive and finance director roles would be split with Edward Murgitroyd, after four years as chief executive officer of the operating business, becoming CEO of Murgitroyd Group, and Keith Young continuing as finance director.

Having both served 17 years as non-executive directors, Dr Kenneth Chrystie was retiring from the board with immediate effect, and Mark Kemp-Gee indicating that he would step down from the board at the annual general meeting later in the year.

Helga Chapman, founder and former managing director of Chapman IP, was appointed as a non-executive director with immediate effect.

The board said the process to appoint an additional independent non-executive director was at an advanced stage.

"I am pleased to report an increase in both revenue and profit before tax, which has allowed us again to propose an increased interim dividend, despite continuing macro-economic and political uncertainties," said chairman Ian Murgitroyd.

"While Murgitroyd operates in a market with good long-term prospects, we are not complacent and will continue our capital investment programme initiated in 2018 through the current financial year, underpinning our future growth plans."

"Reflecting the continuing importance to the group of its European patent and trade mark attorney practice, the acquisition of Southampton-based Chapman IP complements Murgitroyd's existing European network and client base," he added.

The acquisition was expected to be earnings-enhancing for Murgitroyd in the first full financial year following completion.

"Today we also announce a number of important board changes, signalling our intent to refresh the non-executive board, and adopting a conventional executive board structure in anticipation of the next phase of our growth and our increasing activity in the US."

As stated at the time of the firm's full-year results, Murgitroyd said the board would continue to critically assess all aspects of the group, its activities, global operations and structures, reflecting its commitment to ongoing improvement in a fast-changing marketplace.